CELEBRATING THE CONTRACTING OF DEBT

IN 2010, the IMF sent selected African countries to the international markets to acquire debts. It was never our policy initiative.

They rated 12 countries including Zambia that they said had qualified to be lower middle-income countries.

The countries were said to be strong enough to obtain loans from the international markets and within a 10year repayment period, it was predicted that these countries could pay back without much ado.

Like the Structural Adjustment Programmes of the 1990s, this is another experiment on African countries that has backfired!

Much of this debt was incurred through foreign currency denominated Eurobonds issued on international financial markets.

African governments piled up the debt without evaluating the exchange rate risks and the real costs of repaying the debts.

When Zambia contracted the first $750 million Eurobond debt in 2012, transaction advisors, international bankers and our Ministry and Bank of Zambia officials celebrated the “achievement”!

We repeated the excitement with two more accumulation of the debt bringing the total debt to $3billion by 2016.

Today, playing blind and oblivious of the role the IMF played, we are back, looking up to the Fund, celebrating the solutions it intends to bring to our public debt and fiscal crisis, the very crisis it helped create!

And the trouble and immorality is that the IMF never admits its complicity in these policy failures!

We can earn $1.3billion a year from our own mines. We can save $1.3billion we are spending on fuel and electricity subsidies.

We can plug leakages of funds, stop international travels, stop buying overpriced large government procurements.

But awe! We want the IMF.